Making Insurance Markets Work for the Poor in Botswana, Lesotho, Namibia and Swaziland - Scoping Study
This document presents a scooping study on access to insurance services by the poor in Botswana, Lesotho, Namibia and Swaziland. The study aims to:
- Provide an overview of the current situation in these markets;
- Outline the current market structure and document the dynamics and current initiatives.
The paper argues that:
- It is important to consider the broader risk framework when evaluating any notion of access to insurance services;
- Risk mitigation extends beyond insurance to include other options such as savings;
- Not all risks faced by lower-income households conform to what is considered to be insurable.
The paper examines the following aspects of insurance in the countries studied:
- Government and informal provisions;
- Short-term and long-term insurance;
- Distribution and premium collection;
The paper concludes by summarizing key issues for all the countries studied:
- HIV/Aids: insurance can facilitate treatment by designing appropriate insurance products;
- Distribution and payment collection: infrastructure has to be developed to make transactions easier;
- Regulation: it is still in the process of development;
- Lack of market and demographic information: this makes development and pricing of products difficult;
- Dominance by foreign insurers: this leads to lack of local product development;
- Informal providers: they play an essential role, but it is not clear how they could fit into the formal financial sector and regulatory framework;
- Consumer education and financial literacy: these are yet to be developed.